Applied Materials revenue drops, forecast weak

By Noel Randewich Reuters

Posted:
11/15/2012 02:30:11 PM PST

Updated:
11/15/2012 03:02:29 PM PST

SAN FRANCISCO -- Top chip gear-maker Applied Materials forecast current-quarter revenues below expectations as the Santa Clara company struggles with a slowdown in spending on chip manufacturing equipment and troubles at its solar and display groups.

Chief Executive Mike Splinter told analysts on a conference call he expects a pickup in orders entering 2013 but also warned next year would see less spending than in 2012 by contract chipmakers, memory chipmakers makers and PC processor leader Intel (INTC).

Chipmakers worried about the global economy and wrestling with declining PC sales have been spending less on new manufacturing equipment sold by Applied Materials.

"Soft macroeconomic conditions combined with the timing of Windows 8 resulted in subdued back-to-school PC sales and we expect negative PC growth for the calendar year. As a result, we are tempering our expectations for logic spending in 2013," he said.

While orders for wafer fabrication equipment are expected to pick up from a lull in recent months, spending next year will still be between 5 percent and 15 percent lower than in 2012, he said.

Applied Materials said it would take additional steps to cut costs in its struggling solar panel manufacturing gear business.

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Last month, the company said it would cut its workforce by 6 percent to 9 percent and it has also been reviewing the viability of its solar panel business and its display business, which has also been weak.